Making financial literacy a priority
Highlights Report
2017
COLLABORATE.
INNOVATE.
COMMUNICATE.
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Contents
Message from the Chairman and CEO 2
About us 4
Why financial literacy is important 5
Overview of Financial Literacy Australia 6
Grants Program 9
Financial Literacy Grants Program 10
Outcomes of key grant projects 13
10thousandgirl 14
Wesley Mission 18
The Wyatt Trust 20
The Smith Family 22
Girl Guides Australia 24
Women’s Legal Service Queensland – Penda app 26
Macquarie University 28
Strategic projects 31
Research Projects 32
Aged care 35
Aged Care Activities 36
Awards night 39
Awards Night Report 40
Outlook for 2018 43
Our priorities 44
Appendix I 45
Appendix II 47
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COLLABORATE. COMMUNICATE. INNOVATE.
Making financial literacy a priority
Welcome to our first Highlights Report.
On behalf of the Board of directors, we are pleased to present this report outlining how Financial Literacy Australia (FLA) has contributed to improving the financial literacy of Australians over the past five years.
Financial literacy is central to everyone’s lives. Making good decisions about money is a basic life skill, yet surveys repeatedly show levels of financial literacy below where they should be.
Improving how Australians navigate the world of money and equipping them to make sound financial decisions is a great cause.
FLA’s mission is to support and fund suitable financial literacy projects that help a wide range of people in all parts of society. Our vision is to be more than a benefactor. We also want to understand what makes financial literacy programs more effective so we can learn, improve, and build capacity.
To do this, we are refining our current evaluation techniques so we can apply them to every project we fund. We aspire to be a leader by systematically fostering an
evaluation culture in the non-government organisation (NGO) sector. We will become a knowledge hub, guiding NGOs to build and increase their capabilities in delivering financial literacy initiatives that make a difference.
In short, we want to ensure that all our funded projects have a real and sustainable impact on targeted communities and that we use our scarce funds with maximum impact.
We have made significant steps on this journey in the past few years. To date, we have funded 47 projects through our open grants program, many of which have targeted vulnerable groups, such as women, students and Aboriginal and Torres Strait Islander peoples. Thirty of these projects had an evaluation component, and 12 evaluations have been completed.
There have been four grant rounds so far – 2014 to 2017 – and the number of applications and the passion of the applicants has been overwhelming. FLA assessed 750 applications during this time and committed $5.7 million in funding.
Message from the Chairman and CEO
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In addition to increasing financial literacy in the general population, over the next few years, we are also moving into the world of aged care, an area where the financial challenges are complex. Our objective is to help individuals and their families understand their financial options and the services available to them. We have received a $5 million donation specifically for this purpose.
None of our activities would have been possible without the funding via Community Benefit Payments approved by ASIC, and the time and resources invested by NGOs, schools, local councils, universities and research organisations.
We are very grateful and sincerely thank you for your support and encouragement.
Paul Clitheroe AM Chairman, Financial Literacy Australia
Claudia Weisenberger CEO, Financial Literacy Australia
Collaborate We build strong relationships with NGOs, universities and major financial institutions to deliver great financial literacy outcomes in the community.
Communicate We communicate both the successful outcomes and areas where there is room for improvement. We are not afraid of mistakes. We want to learn and continuously improve our approach to financial literacy.
Innovate We want to embolden NGOs to be courageous and innovative in their approach to delivering financial literacy projects.
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About us
Financial Literacy Australia (FLA) promotes financial literacy nationally, primarily through its grants program to non-profit organisations.
FLA is committed to improving financial literacy across all sectors of Australian society by raising awareness and demonstrating the benefits of financial knowledge. We aim to create opportunities for people of all ages and backgrounds to increase their understanding of their financial issues and make the most of their money.
Improving financial literacy is a long-term behavioural change initiative. It requires a multifaceted approach and sustained action to bring about gradual improvement.
FLA is funded through Community Benefit Payments, made by financial service companies when resolving regulatory issues with ASIC.
FLA is a major funder of financial literacy initiatives and is the only philanthropic body focused purely on financial literacy.
What is financial literacy?Financial literacy is an essential life skill. It entails being able to understand and negotiate the financial landscape, manage money and financial risks effectively and responsibly, and pursue and attain financial and lifestyle goals. The National Financial Literacy Strategy defines it as “a combination of knowledge, skills, attitudes and behaviour necessary to make sound financial decisions, based on personal circumstances, to improve a person’s financial wellbeing”.
Every Australian should be able to confidently navigate the financial landscape and make good decisions about money. Improved financial literacy can benefit everyone, regardless of age or income. Being able to make the most of money, manage financial risks and avoid financial pitfalls can have a positive impact on the financial wellbeing of individuals, their families, and in their community.
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Why financial literacy is important
An Australian Psychological Society survey of stress and wellbeing released in 2015 shows that in the five years from 2011–15, on average, 35% of Australians had experienced distress, 36% had experienced depression and 26% had experienced anxiety. Money worries were the leading cause of stress.1
Key reasons for financial stress include:
• dealing with day-to-day money management
• having an inadequate plan for the future. Despite compulsory superannuation, many people do not plan ahead or are not building wealth
• being uncertain about where to go for help or support when facing unexpected events, and
• finding financial products too complex and difficult to understand.
Over the past decade, and particularly since the global financial crisis, financial literacy has gained prominence on policy agendas around the world. Many governments are now identifying it as an important complement to financial market regulation, and policies on consumer protection and financial inclusion.
Based on research, the Organisation for Economic Co-operation and Development2 says factors for the increase of financial literacy include:
• the growing variety and complexity of financial products and rapid evolution of financial markets
• the increasing transfer of a broad range of financial risks to consumers and investors
• the rising number of active consumers and investors in the financial sphere
• the limited ability of regulation alone to protect consumers and investors.
Authorities in about 50 economies are considering, designing, or have implemented national strategies on financial education.
Australia is regarded as a leading player in the financial literacy field and actively contributes to relevant international financial literacy forums.
Improving financial literacy can benefit anyone regardless of age, income or background. It helps people make informed choices daily and throughout their lives.
1 www.psychology.org.au/inpsych/2015/dec/PW2015/2 www.oecd.org/finance/financial education
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Overview of Financial Literacy Australia
FLA is Australia’s leading NGO dedicated to advancing financial literacy and was established in 2012. Its primary mission is to identify and fund financial literacy projects that promote financial literacy in Australia.
Our work supports the National Financial Literacy strategy (Figure 1). The National Financial Literacy Strategy is coordinated
by ASIC and provides a framework to guide policies, programs and activities that strengthen financial literacy and capability.
Figure 1: National Financial Literacy Strategy and FLA’s support
National Financial Literacy Strategy How FLA supports the National Financial Literacy Strategy
A commitment to achieving a better understanding of the barriers to building financial capability and behavioural change.
FLA funds research and evaluation to better understand and influence behavioural change. It shares these insights with the NGOs and the financial community.
Collaborative approaches enhance the reach and impact of programs and activities.
FLA works extensively with NGO to ensure the programs it funds have long-lasting effects.
Targeted approaches are effective for specific audiences.
FLA focuses on the key needs of specific audiences.
Research is deepening the understanding of how financial literacy contributes to financial wellbeing, the interplay of attitudes and behaviours, and the role of financial resilience.
FLA has funded a range of research projects, through universities and NGOs.
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National Financial Literacy Strategy How FLA supports the National Financial Literacy Strategy
Financially inclusive products and services to increase the capability of consumers.
FLA is working with NGOs to increase consumer knowledge of what products are available and the major issues with some products, such as payday lending.
Evaluation of financial literacy initiatives to identify success factors and articulate outcomes.
A core objective is to identify key components of projects that work and share these with NGOs.
Figure 1: National Financial Literacy Strategy and FLA’s support (continued)
How Financial Literacy Australia is fundedFLA’s funding to date has mainly been through Community Benefit Payments, made by financial services companies as part of resolving regulatory issues with ASIC. Some of these were within enforceable undertakings which the companies gave to ASIC. An Enforceable Undertaking is an administrative settlement as an alternative to civil court action. The regulatory issues included breaches of compliance standards on foreign exchange markets and wholesale interest rate markets. Other donations were made by companies who owed refunds to consumers but could not distribute all the money owing. The balance of that money was also given to FLA. To date, FLA has received 13 payments totalling $17.7 million.
Financial Literacy Australia principles FLA works with ASIC to support the National Literacy Strategy, which is built around five priorities:
1. to educate the next generation, particularly through formal education
2. to increase the use of free, impartial information, tools and resources
3. to provide quality and targeted guidance and support
4. to strengthen coordination and effective partnerships, and
5. to improve research, measurement and evaluation.
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FLA seeks innovative ways to increase financial literacy and build sustainable programs:
• by using our expertise to improve the effectiveness of financial literacy programs, and
• by identifying the best opportunities, building partnerships, fostering evaluation and building knowledge of ‘what works’.
FLA is uniquely placed to help develop financial literacy
One of FLA’s core mandates is to fund projects that are both scalable and measurable. It has built strong relationships with NGOs, universities and major financial institutions over the past five years to deliver these projects.
FLA has robust governance processes:
• to ensure it complies with the specified purposes of each Community Benefit Payment
• including a strong board that is actively involved in how and where the Community Benefit Payments are committed
• to ensure it works closely with all key stakeholders on opportunities and key challenges, such as measuring outcomes from sponsored projects, and
• to ensure FLA continues to be a lean, efficient and highly effective organisation.
Financial Literacy Australia’s key activities cover four major areas
1. Grants program – FLA gives funds to promising projects in the NGO sector.
2. Strategic program – FLA identifies areas in which there is a gap in financial literacy and invites proposals from organisations to fulfil that need.
3. Aged care – FLA is embarking on advancing financial transparency for consumers in the aged-care sector.
4. Awards night – FLA recognises projects, resources and research that have advanced financial literacy. Unlike the above activities, this program is not funded through Community Benefit Payments but through key sponsors.
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“We are grateful for the FLA grant which enabled us to
identify ways to make a greater impact on Financial Literacy among the disadvantaged.”
– Crossway Life Care
Grants Program
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Financial Literacy Grants Program
FLA awards grants to projects that show clear potential to improve people’s financial literacy, expand the body of knowledge in this area and improve future financial literacy programs.
47 projects (out of 750 expressions of interest) have been funded in the four years since the grants program began (Figure 2).
In allocating grants to broaden the reach of financial literacy education, we aim to:
• target vulnerable groups, workers, investors and women across a range of age groups
• cover a range of sectors and program areas, such as in the community and workplaces, through research and education
• have a wide geographic spread, including projects with a national focus, without compromising project quality, and
• support the priorities in the National Financial Literacy Strategy 2014–17.
Figure 2: FLA’s focus to date (number of projects)
Indigenous
Disability
General Population
Students
Women
Vulnerable Groups 12
11
10
7
4
3
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Grants Program
Our priority areas vary slightly from year to year. In 2017, the priority was to support projects in:
• investing and/or superannuation
• developing practical money management skills
• helping women
• helping vulnerable communities, and
• helping small businesses.
Funding approachWe only distribute funds to not-for-profit organisations with programs that offer:
• innovation – their pilot programs have the potential to be scaled-up after evaluation
• evaluation – their programs produce positive outcomes and can be evaluated for improvements
• expansion – their programs can be scaled-up after evaluation to reach a larger audience
• product development – their programs show how learning content can be created, and
• research – how financial literacy programs can be improved, such as through behavioural change and effective communication.
Proposals that meet these hurdles are shortlisted for the grants committee (Figure 3), which recommends which ones should receive funding. The grants committee is made up of a smaller group of Board members who meet several times a year, through the grant cycle.
Most funded projects fall into one of three areas:
1. improving the financial literacy and money skills of Australians
2. providing practical materials to advance financial literacy, and
3. conducting research to expand the financial literacy knowledge base.
A key focus for FLA is to fund projects that include robust evaluation. This is an integral part of the overall program as it helps FLA and the community understand what works, increasing confidence in replication and funding.
Selection criteria
FLA reviews the applications at each stage, suggests improvements and selects the best:
• Does the program fill an important need?
• Is the program innovative, strategic or high impact?
• Can the organisation deliver the program
• Will the outcomes be evaluated?
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Figure 3: FLA’s robust selection process
Open invitation for expressions of interest
750+expressions of interest
Invite detailed applications from best prospects
82full applications
Funded programs actively managed by FLA
47funded projects
EvaluationFLA is a leader in fostering evaluation. We have a systematic program to build an evaluation culture in the NGO sector. FLA has funded 30 projects that include an evaluation, and 12 have been completed.
We encourage applicants to be clear about the outcomes for program participants, not just program activities. The key question of any program should be: “What are we really trying to achieve, and how will we know if we are succeeding?”.
Currently, and in the future, we will only fund pilot projects that have an evaluation component, to ensure we generate an evidence base for future decisions. FLA takes into account that experimental projects may not succeed. Even if a plausible approach does not work, it yields important lessons for the future.
FLA runs a one-day workshop and coaching program each year to build evaluation capability in the NGO sector. These workshops give participants the confidence and skills to commission an independent evaluation.
Feedback from these evaluation workshops indicates that NGOs find them extremely useful. They allow the principals to improve the program design, achieve more reliable outcomes and ultimately a better idea of what works.
FLA also shares the lessons learned from our evaluations. All evaluation reports are on our website (www.finlit.org.au/resources/evaluation), and are discussed at financial literacy forums.
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Grants Program
Outcomes of key grant projects
FLA is delighted to share some highlights from recent projects with evaluations, it has funded:
1. 10thousandgirl 14
2. Wesley Mission 18
3. The Wyatt Trust 20
4. The Smith Family 22
5. Girl Guides Australia 24
6. Women’s Legal Service Queensland 26
7. Macquarie University 28
Grant sizePast grants have ranged from $20,000 to $380,000. FLA allocated approximately $1.8 million in 2017 through the open grants process. You can read more about our project criteria at http://finlit.org.au/grants/eligibility-selection-criteria/
‘ By giving people the skills they need, these programs are having a big impact at both tangible and intangible levels. Some of the more disadvantaged people are now able to contribute to the broader community in ways they previously weren’t through their new-found confidence with money. ’– Project principal.
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10thousandgirl
This very successful program was directed at women in regional areas, motivating 91% of participants to achieve their financial goals.
ActivitiesThe Regional Women’s Financial Literacy Roadshow was developed and delivered by community organisation 10thousandgirl. The program aimed to improve the financial wellbeing of women aged 18–45 in regional Australia through education programs, information and resources.
10thousandgirl conducted 19 one-day regional workshops, 10 one-hour webinars and four six-week online courses between March 2015 and October 2016. A total of 2,452 women participated in at least one of the regional roadshow events.
The workshops covered goal-setting, planning for the future, reducing risk and investing.
Figure 3: FLA’s robust selection process
Source: 10thousandgirl
Legend:
Regional workshop registrants’ postcode
Locations of regional events
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Grants Program
OutcomesProfessor Roslyn Russell of RMIT University evaluated the program to check its impact three months after the workshops.
Her evaluation showed:
Financial knowledge
91% of participants felt more motivated to achieve their financial goals
46% of participants reported that they found it easier to initiate a financial conversation with their partners after the program
Financial attitudes
83% of participants felt better about planning ahead
61% of participants had greater confidence in other aspects of their lives
52% of participants felt less stressed about their futures
Financial motivation
75% of participants felt more in control of their money
74% revised their insurance policies
61% reduced their spending so they could save more
57% took action towards achieving a dream
43% took some action on their superannuation
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Most participants said they were more able to absorb financial shocks and work towards their goals because of their participation in the program. They also felt more confident about their money management abilities.
‘ This program gave me confidence to manage
money. Previously I had placed it in the too
hard basket and never really worried about
money or the future. ’– Program participant
Communication also improved. 46% of women reported finding it easier to initiate a financial conversation with their partner.
‘ For someone who had very little knowledge
about financial planning, I am looking forward
to discussing [today’s workshop] with my
partner and making some goals. I will now be
able to discuss finance with my partner and
understand what he’s talking about! ’– Program participant
‘ The program gave me a big kick up the butt.
[It] really changed my life on various levels.
It gave me confidence that I can take control
of many things in my life and influence the
direction I go. ’– Program participant
LessonsHalf the participants were aged over 45, but women in the 18–30 age range benefited most as it gave them ways to plan for financial independence.
The evaluation report indicated the enthusiasm and experience of the facilitator was a key factor in the program’s success.
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Grants Program
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Wesley Mission
Wesley Mission’s In Charge of My Money program typically targeted people on very low incomes. An evaluation of the program found it had led to a sustained improvement in people’s financial behaviour.
ActivitiesWesley Mission runs a broad range of programs for vulnerable people. It launched the In Charge of My Money financial education program in 2011 and FLA funded an expansion and evaluation of the program.
The theme of the three workshops was ‘Know it, Do it, Review it’, focusing on active money management and goal-setting. Sessions were held once a week over three or four weeks. Wesley Mission also provided information on where to get help on money problems.
The participants from 11 not-for-profit services in the Sydney region were either receiving support for homelessness or family stress issues, or were living in a residential rehabilitation unit for drug, alcohol or gambling addictions. Participants typically had very low incomes, with 85% relying on government support.
As an experiment, half the people in the program received SMS messages to test whether ‘nudges’ helped them keep up their good financial behaviour after the workshops ended.
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Grants Program
OutcomesThe program delivered 491 sessions to 3,200 people over 13 months to January 2017, its busiest period. Participants rated In Charge of My Money highly, saying it was easy to understand, relevant and helpful.
“ The program got me thinking about
money and how I used it. Before I just used
it without thinking, but now I think about
what I need the money for. I never took
that into account before. Now I’m holding
onto my money more. It used to all be gone
in 2–3 days, but now my unemployment
benefit lasts a week and a half. “– From the evaluation report
The evaluation found the program led to sustained improvement in people’s financial behaviour, including saving, planning ahead, monitoring expenses and comparing prices to get the best deal. This was particularly impressive given the difficult circumstances of the participants.
LessonsThe SMS reminders lead to a significant improvement in participants’ financial behaviour. People who received nudges showed stronger money management, more savings, closer monitoring of expenses and less emotional spending. This behavioural change was obvious even if the participant said the reminders were not useful.
“ I’m saving every fortnight now, and
have saved $2,000. I’m very happy with
that. And I still have my bills paid. I’m not
short, as I have direct debit coming out of
the bank. I don’t waste money on things I
don’t need any more. “– From the evaluation report
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The Wyatt Trust
A pilot program was delivered to students with intellectual disabilities, giving them the confidence to deal with money.
ActivitiesThe Wyatt Trust is a community organisation and South Australia’s largest employer and trainer of people with intellectual and physical disabilities. It piloted the Work Pay$ program for young people with intellectual disabilities. Students spent one day a week at Bedford’s School to Work Transition Program, and Work Pay$ was added to this program.
The pilot program involved three schools and 23 students, who attended 14 one-hour sessions. It focused on saving, confidence and behaviour rather than money handling and counting. It taught students to be savvy about money so they could be more independent after school and potentially, in the workforce. The end of semester class party was used as a practical exercise in budgeting.
TOPIC 1: INTRODUCTION & BASELINE EVALUATION
TOPIC 2: RECOGNISING MONEY
TOPIC 3: WHERE DOES MONEY COME FROM?
TOPIC 4: NEEDS VS WANTS
TOPIC 5: CONFIDENCE
TOPIC 6: PROTECTING YOUR MONEY
TOPIC 7: MONEY AT WORK
TOPIC 8: SMART SPENDING
TOPIC 9: HOW DO I BUDGET?
TOPIC 10: HELP!
TOPIC 11: DIFFERENT WAYS OF BUYING THINGS
TOPIC 12: VALUE FOR MONEY
TOPIC 13: PARTY PLANNING ON A BUDGET
TOPIC 14: SAVINGS IN ACTION & ASSESSMENT
Figure 6: The Wyatt Trust – Work Pay$: Everyday Money Skills for Young People with Disabilities
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Grants Program
OutcomesMost students gained something from the program, showing the biggest improvements in:
• knowing the difference between needs and wants
• taking care of money
• saving for a particular item, and
• being more confident with simple transactions.
“ When Annette started the program, she
was unable to recognise most Australian
notes and coins. By graduation, Annette
was able to stand in front of the class and
confidently identify each Australian note for
the class. You could see the pride beaming
from her face as the class applauded. “– Program participant
“ Bryan was in the habit of buying a can of
soft drink every week at work experience.
The Work Pay$ program’s concepts of value
for money and saving resonated with him
and over time, Bryan reduced his spending
at the vending machine. If he wanted a
can of soft drink, he would buy it at the
supermarket before work to save money. “– Program participant
LessonsThe pilot revealed several improvements that are needed if the program is scaled up and used in other schools, including:
• adding more time to practise in real-life settings, such as shops and banks, and
• engaging parents so they can reinforce the lessons.
Figure 7: An illustration developed for the program
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The Smith Family
The Smith Family is a national children’s charity that helps disadvantaged young people succeed at school, to help them avoid a lifetime of poverty.
Activities The Smith Family delivers its Certificate 1 Financial Services program in more than 60 schools in disadvantaged communities across Australia. The program reaches about 1,000 young people annually in years 9–11, and FLA is one of a number of funders.
Certificate 1 in Financial Services is a short course that focuses on the essentials of money management and developing skills to achieve financial goals.
The course was created with the leadership and support of ANZ. It is based on modules in the bank’s award-winning MoneyMinded program, which consists of five 2½-hour sessions delivered by an accredited trainer.
The FNS10110 – Certificate 1 in Financial Services is awarded when a participant has finished all five elements and passed an assessment.
The Smith Family offers the Certificate in communities in NSW, Victoria, the ACT and Queensland.
81% of enrolled students achieved a Certificate 1 in Financial Services, and three months after completing the program reported they:
• had gained knowledge – 79% understood how superannuation works
• understood their rights – 86% knew more about their financial rights
• had improved confidence – 91% reported that they were confident about making financial decisions, and
• had changed their behaviour – 79% were using a savings plan.
The program has been evaluated annually since 2013 and has shown excellent results. Students are surveyed before the program, immediately after the program and three months later.
“ I learned a lot by knowing what my rights
are and [about] superannuation. “– Program participant
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Grants Program
OutcomesMore than 80% of enrolled students complete the certificate. The biggest increase in knowledge is about the basics of superannuation – from about 30% of students to 96%. Students also vastly improve their knowledge of consumer credit, consumer rights and where to get help with financial decisions.
Students said the course had changed their behaviour. Most said they were now more likely to shop around and use a budget. Many students also reported feeling more confident about making financial decisions.
FLA is providing $300,000 over three years to enable The Smith Family to reach more students.
“ I have begun to use my debit card to
store money rather than keep it in cash.
I find it easier to save that way as I am
less tempted to spend it. “– Program participant
LessonsThe Smith Family added rich information about what works and what doesn’t for a particular population. Overall, The Smith Family identified key outcomes as:
• measuring attitudinal change in the cohort to understand what resonates with particular audiences, and
• reinforcing programs to achieve success.
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Girl Guides Australia
Girl Guides Australia offers practical lessons on personal finance to enable girls and young women to make better decisions, enabling them to have an independent and secure financial future.
ActivitiesGirl Guides Australia’s Guide Your Money program builds life skills through ‘learning by doing’ with other girls.
The program is aimed at two age groups:
• the Foundations program for girls aged 7–12, and
• the Independence program for young women aged 18–30.
The Guide Your Money program aims to encourage girls and women to build life skills in financial literacy and develop an understanding of how financial literacy contributes to having an independent and secure financial future. The course was developed with assistance from FLA.
“Women’s economic empowerment starts with girls,” says Helen Reid, National Program Manager.
According to Helen Reid, young Australian women are being given little or no education around financial literacy and yet they’re signing mobile phone contracts, trying to save for a car and making career decisions.
“Women get to the workforce and a superannuation form is put on their desk to fill out, and that’s often the last time they think about how much they’ll have saved when they reach retirement age.
“We want to build their confidence and skills in financial matters and ultimately help girls be financially self-sufficient so they can take charge of their lives,” she says.
The Guide Your Money Foundations program, for 7–12 year-old girls, offers fun learning and skills building in financial literacy. It covers topics such as budgeting, saving and goal setting and is available as a hard copy resource for Guide leaders.
Figure 8: Girl Guides program – ‘Guide Your Money’
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Grants Program
Guide Your Money Independence, for women aged 18–30, is an online program empowering them to take control of their financial future. They build skills together and individually by accessing online content.
Topics include comparison shopping, saving, investing, car and home loans, and planning your financial future. The program is available at www.guideyourmoney.org.au.
OutcomesBoth Guide Your Money programs were launched in early 2017 and initial responses have been enthusiastic. About 1,300 copies of the Foundations program booklet have been distributed to state Girl Guide offices and other Guiding organisations around the world.
“ The program is easy to use and the girls
really enjoyed doing it. “– Guide leader for girls aged 7–12
Web statistics indicate that more than 500 people accessed the Independence program online.
“ The needs and wants exercise really
stimulated some thoughtful responses.
It has been one of the best programs that
we have done. “– Guide leader for girls aged 18–23
“ The program was easy to deliver and it
really appealed to the Guides. Thank you so
much for enabling us to deliver such a fantastic
program. It was amazing how quickly the guides
cottoned onto the idea of financial risk when
we used M&Ms to deliver the message. “– Guide leader for girls aged 14–17
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Women’s Legal Service Queensland – Penda app
Penda is Australia’s first financial empowerment app for women affected by domestic and family violence.
ActivitiesPenda is a free, simple-to-use app that provides information on safety, finances and legal issues, and includes links to referral services and further support.
The Women’s Legal Service Queensland developed the app for victims of domestic and family violence. It was launched in September 2017.
Economic abuse is a common form of domestic and family violence and the app has a strong emphasis on helping women secure financial independence. It is estimated that 16% of women have experienced economic abuse in their lifetimes3.
Figure 9: The Penda app
3 http://theconversation.com/revealed-the-hidden-problem-of-economic-abuse-in-australia-73764
Penda is Australia’s first national financial
empowerment app for women who have
experienced domestic and family violence.
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Grants Program
OutcomesThe most important financial advice for anyone leaving a violent relationship is to talk to a financial counsellor, and the app includes information on where to go.
“ Penda asks the important questions that
would have made a difference when I was
escaping domestic violence and homelessness.
It helps women to see there is help and
hope. It opens a new door of information and
support, leading to choices and informed
decision-making. “– Rachel
Some women don’t have a choice about when to leave an abusive situation, but others can plan their escape so they have some financial resources and independence as soon as they walk out the door. FLA supplied core funding for the project and Credit Union Australia supported a national washroom advertising campaign.
“ I didn’t know there was all those services
available that are mentioned in Penda.
That would have made a massive difference
for me. “– Hana
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Macquarie University
Macquarie University launched its retirement village calculator in August 2017, the first of its kind in Australia. There are at least 184,000 seniors living in retirement villages nationwide. The average age of new residents is 75.
ActivitiesThe free calculator takes the complex range of entry, monthly and exit fees, and calculates a simple ‘equivalent monthly rent’. This means people can easily compare the cost of different retirement villages.
Dr Tim Kyng from Macquarie University developed the calculator after a frustrating experience trying to help his own mother choose between retirement village options.
Information on costs is not presented clearly, and some retirement villages either withhold key information or bury it in complex documents. The ‘deferred management fees’ are particularly tricky.
Many people misunderstand the process of living in a retirement home, thinking it is like buying their own apartment. But residents only have the right to live in a unit until they become too sick, voluntarily relocate or die.
Generally, contracts are difficult and time-consuming to understand and even harder to compare with others. Some operators are reluctant to supply a copy of the contract, which inhibits comparison shopping.
ExampleA user of the calculator inputs the retirement village’s entry, ongoing and exit fees, as well as information about sharing profits or losses on the resale of their apartment. The calculator then provides a comparison rent per month.
When comparing two retirement villages in Sydney – one with a $775,000 entry fee (village A) and another with a $750,000 entry fee (village B) – the one with the lower entry fee and monthly fee (village B) appears cheaper. However, when all things are considered, the calculator shows village B will cost an extra $3,500 a month over seven years (Figure 10).
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Grants Program
Figure 10: Example of how the calculator works
Monthly fee
Exit fee Share capital gain/loss
Equivalent monthly rent (over seven years)
Village A $850 No Yes $1,800
Village B $450 Up to 35% No $3,500
The calculator is available at www.rvcalculator.org
OutcomesThere have been more than 22,000 visits to the website to date.
“ This is really bad news. Grim actually.
I love it because it does a whole lot of
calculation I couldn’t do. And then what
happens when you need aged care? This is
something that needs regulation. And I am
not overly enthusiastic about regulation
normally. If you have transparency it becomes
self-regulation. “– Consumer feedback
“ What? You’re kidding! You’re kidding? Wow.
And that excludes all food and other care?
That’s a huge amount. I don’t think any of us
have ever calculated it out this way before. “– Consumer feedback
“ The main costs should be in big print on
page one of the contract: the exit fee, entrance
and maintenance fee. It would be horrible to be
at the end of your life and having to deal with
all these fees when you leave. Especially if
you go into a nursing home. “– Consumer feedback
“ I’m glad I have a legal brain for looking
at the contract but it’s gobbledygook for an
average person. I knew to look at the schedule
for details but most people wouldn’t. As a
lawyer I used to get extremely bored when
asked to read contracts in detail too. Looking at
this Retirement Village contract, I think they’ve
done it on purpose. It should be in plain English
and have a summary document with all the
important information. The calculator certainly
helps get to the bottom of it all. “– Consumer feedback
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“Man cannot discover new oceans unless they have the courage to lose sight
of the shore” – Andre Gide
Strategic projects
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In addition to the grants program, FLA actively identifies one or two areas in which we have identified a gap and funds research projects that further advance understanding in financial literacy. Here are the preliminary findings of the first strategic project we have sponsored.
Financial wellbeingIn 2016, FLA commissioned the University of New South Wales to explore the issue of ‘financial wellbeing in the Australian context’.
The report provides a framework to guide practitioners in improving and measuring the financial wellbeing of all Australians.
The framework identifies three interrelated dimensions that make up financial wellbeing. They are:
• meeting expenses and having some money left over
• being in control of finances, and
• feeling financially secure.
There is also an important time dimension. Financial wellbeing is also determined by how people feel about their future and how they prepare for it.
“ We know that over two-thirds of Australians
feel some level of financial stress and around
one in eight experience high levels of financial
vulnerability. A better understanding of financial
wellbeing could help to better tailor appropriate
products, services and supports to improve
outcomes for Australians, and the economy. “– Professor Kristy Muir, CEO of the Centre for Social Impact and lead author of the report
The report also explores what things influence a sense of financial wellbeing. The strongest were financial capability, personal health, financial inclusion, social capital, and income. Life events, the ability to respond to financial shocks, and household, community, and societal contexts also all play crucial roles.
The findings are helping FLA guide financial service organisations as they develop offerings that promote and improve the financial wellbeing of all Australians.
The report also gives FLA a unique insight into what constitutes financial wellbeing, and importantly shows us what we can do to help people.
The report is available at http://finlit.org.au/funded-projects/funded-projects-2016/financial-wellbeing-research/
Research Projects
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Strategic projects
Figure 11: The factors that influence financial wellbeing
Personalhealth
Household,community, and society conditions
Life events (eg.
financial shock)
FINANCIAL WELLBEING
Able to
manage
debts
Feeling
satisfied with
the financial
situation
Setting & pursuing
long-term
goals
Able to meet
expenses
Savings
buffer
Having
control over
your financial
situation Able to afford
“little extras”
Financialinclusion
Social capital
Economicresources
Financial capability
(knowledge, skills,attitude & behaviour)
Today & in the future
Limited
worry
FEELING FINANCIALLY
SECURE
MEETING EXPENSES
WITH SOME LEFT OVER
BEING IN
CONTROL
(Influences)
(Influences)
Financial ResilienceFinancial Resilience
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“Inside every older person is a young person wondering
what happened.”
Aged care
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FLA has received a considerable sum in Community Benefit Payments specifically for aged care. We have been entrusted to support and fund suitable projects to improve financial literacy in this sector, covering two types of services – home care and residential care.
Financial literacy is generally low among the elderly and their family members, particularly when they face the complexity of residential aged care. Often decisions about location and how to pay for accommodation must be made quickly and under extreme emotional strain. Currently, there are limited sources of clear and timely financial advice for consumers in this sector.
Home care The Australian Government’s Home Care Packages Program is designed to help older Australians live independently in their own homes. The program provides a subsidy – depending on an individual’s financial status and needs – to help pay for care and services.
It has four levels of support:
• basic
• low level
• intermediate, and
• high care.
Residential care Residential aged care includes a range of options and accommodation for older people who are unable to live independently in their own home. This can range from personal care to assistance with daily living and 24-hour nursing care.
FundingThe overarching goal in both services is to replace a large amount of government regulation with market mechanisms, providing more consumer information and making pricing more transparent.
In home care services, this is called Consumer Directed Care and aims to offer individuals more choice and flexibility about:
• types of care and services
• how care and services are delivered
• who delivers the care and services, and
• when care and services are delivered.
Aged Care Activities
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Aged care
In residential care, the Australian Government has made significant reforms over the past five years. There are now refundable accommodation deposits, daily accommodation payments or a combination of both.
The different payment mechanisms and consequences for the aged pension, family home and other assets is both confusing and highly stressful for consumers.
Our approachOur objective in this important and complex sector is to provide individuals and their families with the skills to understand their financial options and, ultimately, the services available to them.
To date, we have performed desktop research and consulted experts and major stakeholders in this area. Using the knowledge and experience gathered, FLA has scoped two high-level initiatives that may have the greatest consumer impact and add maximum value:
• Managing the financial aspects of the home care package – this pilot project may involve a consortium of community-based organisations and disseminate the information to the target audience of older people, carers and families.
• Real-time web-based calculator for residential care – this exploratory project will investigate whether a web-based calculator can work, given the complex financial permutations and implications. It will also examine whether the calculator can provide adequate information to enable people to make informed decisions on financial positions.
The FLA Board is reviewing these two opportunities and assessing a shortlist of candidates to deliver the projects within set timelines and budgets.
An update on the progress of these initiatives will be available in our next Highlights Report.
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We want people to know about the fantastic work being performed to
improve financial literacy.
Awards night
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FLA’s annual awards night encourages the organisations and individuals we have funded to share their successes. Our objectives are for practitioners, supporters and educators to learn from these inspiring initiatives.
We received more than 45 applications for the 2017 awards and 18 were shortlisted.
Applications were invited from organisations and individuals that performed or were undertaking programs in six categories:
• large scale
• small scale
• to meet the needs of a specific audience – for example, women, Aboriginal and Torres Strait Islanders, retirees
• to create a resource to help people make better financial decisions – for example, an app, game or booklet
• research to help people understand the issues better, and
• substantial contributor to advancing financial literacy, such as a long-term volunteer, educator or communicator.
The judging panel comprising of Robert Brown and Elaine Henry (FLA Board members), Miles Larby (Senior Manager, ASIC) Delia Rickard (Deputy Chair ACCC), Carolyn Bond (Consumer Representative) Andrew Robertson (Senior Reporter ABC – The Business) and Hugh Harley (Partner at PWC) volunteered their time and expertise to review and assess the shortlisted applications. Nine winners were selected and announced.
The panel used a rigorous filtering system to assess each project.
• Was there a need for the program?
• How relevant was the program to its designated audience in terms of quality and reach?
• Was there a plan to measure outcomes or was a program already embedded in the project to assess its impact?
• Was there an innovative component?
The 2017 winners were:
• Large program: ANZ’s MoneyBusiness. MoneyBusiness is a series of workshops developed by ANZ and the Australian Government to build the money management skills and confidence of Indigenous people and develop a stronger savings culture, particularly in remote communities.
• Small program: Student Services Griffith University. The Budgeting 101 Workshops program is primarily aimed at improving students’ financial management skills.
Awards Night Report
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Awards night
• Small program: Alesco Senior College (ASC). The ASC Financial Literacy program is a program that focuses on increasing the financial literacy skills of students at Alesco Senior College. The majority of students that attend ASC come from lower socioeconomic backgrounds. The program runs throughout all of the campuses and gives each student practical exposure to the running of ‘real’ businesses, as well as improving their financial literacy and money management skills.
• Targeted program: The Smith Family’s Certificate 1 Financial Services Program. The Certificate I Financial Services program is a short course, developed using content from ANZ’s MoneyMinded financial education program that is delivered to young people aged 15–17 in disadvantaged schools. The approach is interactive and aims to empower students to take charge of their finances. Qualified
facilitators help students identify positive saving and planning principles. They also provide age-relevant understanding of credit, superannuation and financial planning concepts using appropriate language and suitable vignettes.
• Targeted program: Good Shepherd Microfinance. This is a training module to help microfinance workers across Australia improve the conversation with applicants for a No Interest Loan Scheme (NILS) loan.
• Research and evaluation: Good Shepherd Australia/New Zealand’s Firmer Foundations. This is a comprehensive program with a suite of holistic program components including group work, developing social capital, providing individual financial capability coaching and conducting workshops. The Firmer Foundations Program has successfully supported more than 300 Victorian women and over 250 children to improve their financial independence and wellbeing.
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• Resource and communications: Wingate Avenue Community. Adults with low literacy levels were provided a resource kit to improve their financial knowledge and skills (namely banking, budgeting, loans and financial options); both native English speakers and also migrants and asylum seekers.
• Resource and communications: Women’s Information and Referral Exchange’s (WIRE) Women Talk Money. The Women Talk Money is a website based on WIRE’s extensive research into women’s relationship with money, financial capability and financial security. The Women Talk Money website provides easy to digest information including suggested financial conversation strategies, quizzes and videos. It also guides women on how to have structured conversations around finances with their partner.
• Contribution: Zoe Lamont: Zoe won the award for her Regional Women’s Financial Literacy program – 10Thousand Girls. The 10thousandgirl educational program aims to create a safe, comfortable learning environment for women to talk about money. The program design and interactive nature works to shift women’s knowledge, attitude and behaviours so participants feel empowered to take practical steps to improve their financial future.
The awards night was generously sponsored by five major financial institutions (Australian Super, ANZ, Colonial First State, CBA and IPAC) that are committed to improving financial literacy.
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Outlook for 2018
“Improving the ability of Australians to navigate the world of money
and equipping them to make sound money decisions is a great cause.”
– Paul Clitheroe
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In the coming year, we will maintain our commitment to our financial literacy grants program for those projects that have scale and can demonstrate clear outcomes.
In addition, each year we will identify one or two strategic areas of national significance in general financial literacy where we see a gap. Organisations will be invited to submit proposals to undertake a project to fill that void. For 2018, we are in the planning phase to fund research on day-to-day and week-to-week money management. A better
understanding of these dynamics will help in providing more effective advice about money management strategies.
Another key priority will be on improving financial transparency in the aged care sector. We are currently in the consultation and feasibility phase. We anticipate starting the aged care program in 2018 (Figure 12).
Figure 12: FLA’s future priorities
FLA current portfolio Proposed allocation of New Funds over
the next 2 years
FLA past portfolio
40%
20%
40%
Aged Care Projects
Strategic projectsincl. building capability/evaluation
Open Grant Projects
Open Grant Projects
2014–2017
Our priorities
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Appendix I
Completed projects
Organisation Project Grant
10thousandgirl Regional women’s financial literacy roadshow $150,000
CHOICE Research on how to engage people on superannuation
$120,000
Council of Education Associations of SA
How parents can help their children be money savvy
$50,000
Crossway LifeCare B-Empowered financial coaching program $80,000
Financial Counselling Australia
Website on credit and debt issues – National Debt Helpline
$207,400
Financial Counselling Australia
Prisoner financial literacy / self-help on debts $58,000
Financial Rights Legal Centre / CALC
Stage 1 – Research on payday loan borrowers $47,590
Girl Guides Australia Peer learning through Girl Guides $229,460
Good Shepherd Microfinance
Stage 1 – Research on the impact of the initial interview with StepUP applicants
$95,000
Stage 2 - Creating capability in microfinance workers on financial literacy
$48,500
Mission Australia Delivering Wesley Mission’s In Charge of My Money
$48,738
Noosa Library Service
Literacy and money skills tutoring $26,225
Participate Australia (previously FRANS)
Financial literacy for young adults with an intellectual disability
$57,700
Salvation Army (NSW)
Evaluation of ‘You’re the Boss’ program $38,150
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Organisation Project Grant
St Michael’s Collegiate School
Program for students with disabilities $12,500
University of South Australia
Developing new survey questions to better link financial knowledge to outcomes
$120,000
University of Technology Sydney
Research on interactive financial literacy at point of sale for superannuation
$49,675
University of Western Australia
Comparison of university financial literacy courses $38,021
University of Western Sydney
Financial literacy to increase student interest in maths
$80,000
Wesley Community Services
Stage 1 – NSW-wide delivery of the Wesley financial literacy program
$165,372
Stage 2 – Evaluation of the ‘In charge of my money’ program
$61,000
Wingate Avenue Community Centre
Financial literacy in English classes for migrants $100,000
WIRE Stage 1 – Research on women as financial equals in relationships
$24,892
Stage 2 – Online material to help women grow as financial equals in relationships
$151,600
Woodville Primary School
Play supermarket $17,500
Wyatt Trust Everyday money skills for young people with disabilities
$48,500
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Appendix II
Projects under way
Organisation Project Grant
Aust Shareholders’ Assoc
Women and investing $110,186
Brisbane Indigenous Media Association
Experiment with money stories on indigenous radio
$86,400
Brotherhood of St Laurence
Home ownership education $80,000
Stepping Stones program on small business for migrant women
$194,672
CHOICE Stage 2 – Online experiment to boost engagement with superannuation
$180,000
Consumer Action Law Centre / FRLC
Stage 2 – Payday loans public education program $380,000
First Nations Foundation
My Moola program for indigenous trainees with AFL SportsReady
$158,000
Foundation for Young Australians
$20 Boss – Entrepreneur program for schools $600,000
Good Shepherd ANZ Firmer Foundations – For women who are vulnerable or experiencing family violence
$265,669
Good Shepherd Microfinance
Stage 3 – Boosting financial literacy for NILS clients
$220,000
Indigenous Consumer Assistance Network
Yarnin’ Money financial literacy program in Far North Queensland
$273,918
Macquarie University Retirement village calculator $128,154
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Organisation Project Grant
Mypolonga Primary School
Student lead businesses at Mypolonga Primary School
$25,000
Participate Australia Money made easy $153,120
Small Business Mentoring Service
Women in small business $172,500
The Smith Family Expansion of financial services course for disadvantaged youth in high schools
$300,000
University of Melbourne
Measuring efficacy of ‘Street Finance’ program in high schools
$46,368
University of South Australia
Research on financial literacy of older people $50,000
Women’s Health in the North
Let’s Talk Money – Evaluation $50,000
WIRE Stage 3 – Research on financial literacy for women experiencing family violence
$181,690
Women’s Legal Service Queensland
Penda app for women experiencing family violence
$229,810
More details are at http://finlit.org.au/funded-projects/
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While considerable progress has already been
made, bringing about a significant change
in Australians’ financial literacy levels is
a long-term journey – one that will take at
least a generation.
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Financial Literacy Studio 4.1 105 Kippax Street Surry Hills NSW 2010
Enquiries to Financial Literacy Australia: 02 8197 9932 [email protected]
www.finlit.org.au
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